The Saudi government looks set to loosen fiscal policy this year which should support a pick-up in economic growth. However, as we explain in this Watch, households won’t be net beneficiaries from this. The introduction of a new household allowance and recent bonus awards will only just offset the impact of a wave of austerity measures that will cause inflation to jump to as much as 6.5% this year. Overall, we expect household spending to remain a weak spot in the broader economic recovery.
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